question about dependent care flex plan (pay, taxes, checking account, charge)
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I tried the flex plan at work this school year. I taught at a public school and had daycare expense taken out of my check pre-tax. The way it worked was they took it out of my check, I then had daycare deduct from my checking account the amount and then had to submit a form to get reimbursed from the flex plan. It was a huge hassle and hated it.
Now that it is summer, I don't need childcare and they said I could do the change in status form and that amount would not be deducted anymore. Okay great. Well I did the form- the flex plan sent the money back to my school district and from I understand the school gets to keep it? On top of that, the next paycheck- that amount was still deducted- not sent to flex plan- but just kept by school district.
Does this sound wrong? I understand that whatever monies are left in my medical account I forfiet- hence why I only put $5 a check in to cover copays. But I was sending a decent amount of money for childcare. I am shocked that the school gets to keep that money after I filed change in status.
Anybody else deal with this or know anything about this?
Does your Plan run on a Calendar year or Fiscal (school year)? Most plans run run on calendar year. (when does the detuction start for the 'year' in January? or some other month?
The only way you can 'stop' dependent care if you have had a change of status:
What is an eligible change in status?
IRS regulations state that an individual may change or stop his or her FSA contributions only within 31 days from the date of a qualified change in family status such as:
The addition of an eligible dependent through birth, adoption, or legal guardianship
Marriage or divorce
The death of a dependent
A change in employment status such as:
Your spouse's gain or loss of employment,
The beginning or end of a leave of absence without pay for you or your spouse
Changes that do not qualify include:
A change in your dependent care arrangement (for example, if you change to a provider who charges less)
A change in the amount of expenses you incur for part of the year (for example, during summer months)
Any 'unspent' money is sent to the IRS at the end of the year. (On dep Care) Health care is cross balanced with other member of the plan who left plan (for qual reasons) but the plan sent them more money then they put in. Any extra after that is sent to the IRS.
Yes the paperwork is a pain, but its pre-tax money, so think of getting daycare for 25?% off, on the spot, vs filing next year with your taxes and you might get a tax deduction for it.
My last paycheck from school will be Aug 31st. So the school will send that money to IRS then? Change in status for this was allowed- but only for dependent care. I was just confused because flex plan recieved paperwork fine and did send that money back to school division. Okay...but then next paycheck happened and it was still deducted from my check but flexplan didn't recieve it- school kept that amount. So is it safe to assume then if I worked for them until retirement they would keep taking that money? I thought a change in status form allowed you to change things. Why does the school get to continue keeping that amount? Shouldn't it go back to me then?
My last paycheck from school will be Aug 31st. So the school will send that money to IRS then? Change in status for this was allowed- but only for dependent care. I was just confused because flex plan recieved paperwork fine and did send that money back to school division. Okay...but then next paycheck happened and it was still deducted from my check but flexplan didn't recieve it- school kept that amount. So is it safe to assume then if I worked for them until retirement they would keep taking that money? I thought a change in status form allowed you to change things. Why does the school get to continue keeping that amount? Shouldn't it go back to me then?
Then it should. Go ask the school. Someone may not have done the paperwork right.
For your DepCare & HC care account, It sounds like you will have a change of status. Effective 8/31? Did you lose your job at end of last school year? and you elected to have your nine months of pay payed to you have 12 months? When did your contract end? If may be that your schools payroll dept, does not know they you told the DepCare/HC mgmt company that you have a change in status. so payroll will continue to take out the money because it has not been told not to. If there is 'extra' unpaid money, is should be returned to you, by either the mgmt company and/or the school.
Well, did some research- the flexplan people said they sent it to the school early July and the school says that the flexplan people have the money. Looks like I am on a merry-go-round .
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